Solar comes to rescue for drought-hit cotton farm

NSW cotton farmer Jon Elder has waved goodbye to his $500,000-plus annual diesel bill thanks to the installation of a solar pumping system that will also provide a nice side-earner from renewable energy credits just as the state struggles with the worst drought in decades.

The 500-kilowatt solar system installed at Mr Elder's property near Narromine west of Dubbo should pay for itself in under five years just through halving the yearly shell-out on diesel fuel, the farm's biggest cost.

"The rest is cream," he said, pointing to an expected $100,000 of revenues to flow over the next five years from the sale of large-scale renewable energy certificates generated by the system. The farm's carbon footprint should also fall by about 500 tonnes a year.

The solar array takes up one hectare of Jon Elder's 2500-hectare cotton farm.

"It was a cold-hearted business decision, but we are also really excited about the environmental benefits," Mr Elder said ahead of an official launch ceremony on Friday to be attended by NSW Primary Industries Minister Niall Blair and the local member for Dubbo, Policy and Emergency Services Minister Troy Grant.

About one quarter of the circa $900,000 up-front cost was funded from the NSW Rural Assistance Authority's farm innovation fund.

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Installed by Australian company ReAqua, the system is about five times bigger than any existing solar pumping system in Australia, where the technology has been slow to take off but offers huge potential, said ReAqua managing director Ben Lee.

Early adopters of the systems have found it to be critical in building drought resilience, said Mr Lee, who has seen a jump in inquiries from farmers wanting to tackle their energy costs.

"The potential of it has just been realised now," he said, pointing to the scarcity of companies that can combine expertise in both solar power and water pumping.

"The other barrier has been cost, but we try and make these systems pay for themselves without requiring a government rebate."

Forward prices for Large-Scale Generation Certificates are tipped to dive from 2020. Mercari

Attractive payback

Mr Elder took a five-year forward contract with an energy trading company for the sale of his Large-scale Generation Certificates (LGCs), at prices initially around the current spot price before dropping down.

Mr Lee is "not too fussed" about the forecast dive in prices because ReAqua has got pricing down to a point where the system has an attractive payback even without the subsidies.

"This system will have paid for itself in five years so even if they're worth a dollar in five years its money for nothing," he said.

Mr Elder's system is connected to one of the deepwater bores on his property, with most energy spent on getting the water to the surface. The surface water that normally meets a quarter of the farm's needs is absent this year.

The 1500 solar panels involved cover one of the farm's 2500 hectares. Included within the project is a solar forecasting technology trial by CSIRO.